Business Barometer®: Small business confidence ends five-consecutive month decline in September

Toronto, October 3, 2012 – Optimism among Canada’s small- and medium-size businesses rose last month for the first time since March, according to the Canadian Federation of Independent Business (CFIB). The Business Barometer® index increased two points in September to 62.0, from 60.0 in August.

“After a five-consecutive month decline in business confidence through the spring and summer, small business owners were a little more upbeat in September,” said Ted Mallett, CFIB’s chief economist and vice-president. “Despite this good news, however, the Index level still suggests Canada’s economy is growing at below-average rates.”

Small business owners in Newfoundland and Labrador (75.0) are now the most optimistic in the country. Entrepreneurs in Alberta (71.1) and Saskatchewan (67.6) are close behind, while optimism is close to the national average in New Brunswick (62.8), Quebec (61.2), Ontario (60.1) and British Columbia (59.0). Optimism is much lower in Nova Scotia (55.6), Manitoba (54.7) and Prince Edward Island (44.6).

Overall, thirty-six per cent of business owners reported shortages of skilled labour as a constraint on their business,” added Mallett. “This is the first time since the recession that concerns over the shortage of skilled labour have exceeded worries about insufficient customer demand.”

Full-time hiring plans continue to be better than average for this time of the year: 18 per cent of business owners plan to hire full-time staff in the next three or four months compared to 12 per cent who say they will cut back. These numbers are much more positive than the findings from September 2011 and 2010. Overall, 41 per cent of business owners described their state of business to be in “good” shape, about three-times the 12 per cent who said their state of business is “bad.”

Measured on a scale of 0 and 100, an index level above 50 means owners expecting their businesses’ performance to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 70 when the economy is growing at its potential. The September 2012 findings are based on 918 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.2 per cent 19 times in 20.

For more information or to arrange an interview with Ted Mallett, call 416-222-8022 or email public.affairs@cfib.ca

As Canada’s largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 109,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.